SMEs resolved to protect employee livelihoods

Photo by Joyce Toh

Battling the economic fallout from the COVID-19 pandemic has taken a toll on entrepreneurs, especially those heading micro and small enterprises. A DBS survey showed that over eight in ten owners of micro and small businesses have made personal sacrifices to keep the lights on amid the pandemic.

Of this group, close to four in ten shared that their mental and physical well-being have suffered, while more than half shared that they have had to tap on their personal savings and assets to keep their businesses afloat.

When asked about the main motivation driving them forward despite facing what are some of the most challenging times in their entrepreneurial journey, around six in ten said that they felt responsible for protecting the livelihoods of their employees.

These findings emerged from the latest edition of the DBS SME Pulse Check Survey conducted at the start of the year with over 200 micro and small enterprises across a broad spectrum of industries.

Joyce Tee, Group Head of SME Banking at DBS, shared that it was important to remember that business owners are individuals who need to be supported too. “Businesses involve real lives and livelihoods, and when it comes to micro and small enterprises, the stories are even more personal, with business owners sometimes needing to make personal sacrifices to keep their businesses going.

“With the economic situation and road ahead still uncertain, business owners must be ready for a long fight, and will need to take care of themselves to avoid burning out. That is why DBS is going beyond just supporting our micro and small enterprises with their working capital and digital transformation needs by rolling out new initiatives to cater to the well-being of business owners.”

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With Singapore Budget 2021 due to be announced in less than two weeks, business owners were largely sanguine about growth prospects for the year ahead, with only 15% expressing pessimism.

However, over four in ten business owners hope that the Government can roll out more measures to support their working capital needs, while over three in ten would like more wage support measures.

These sentiments reflect the top three business priorities indicated by micro and small enterprises for the new year, which are (1) ensuring sufficient cashflow; (2) ensuring sufficient manpower; and (3) pivoting to new income streams.

When asked how business owners would like banks to support them in the year ahead, the top three responses were for more (1) working capital support; (2) connectivity opportunities; and (3) support to become more sustainable.

Tee noted that these findings reflect a sense of quiet confidence among SMEs that the bank has started to observe since late last year. A poll that DBS conducted in October 2020 with SMEs from industries most badly hit by the pandemic showed that 97% of respondents were confident of meeting their repayment obligations for Government-backed loans in the year ahead.

The latest survey results further indicate that micro and small enterprises were starting to see some light at the end of the tunnel and were thinking about their business beyond the pandemic.

Tee added, “While working capital and cashflow concerns continue to be top of mind, business owners are giving serious thought to how they can reposition their operating models to capture new revenue streams in a changed world. This includes a growing appetite for more business partnerships.

“We are also delighted that business owners are becoming increasingly keen on more sustainable operations.”

In 2020, DBS approved over 10,000 collateral-free loans totalling more than SGD 5 billion to SMEs in Singapore, with over 90% of the loans going to micro and small enterprises. To help SMEs innovate, adapt and thrive in the post-pandemic economy, DBS has availed a suite of digital solutions to help SMEs transform their businesses.